Divorce and pensions

If pensions are to be shared on divorce, the court will make an order for a pension sharing order. This is where the whole or a proportion of one party’s pension is taken out of their pension fund and transferred into a separate pension fund in the other party’s name. The result is that both parties have completely separate pension funds that will pay an income to them on retirement. In some circumstances your fund will stay with the original provider, in others it will transfer to a different provider.

It is possible to argue that a pension should be excluded if it is a pre-marital asset but this is a matter for the discretion of the court. It may depend on how long you lived with your spouse before you got married and what pension provision they have.

Yes. The only difference is that the receiving party will not receive a further lump sum. Implementation of the pension sharing order will result in a reduction to your income but your spouse may not receive money from the pension themselves if they are not old enough to do so.

The basic state pension cannot be shared. The Additional State Pension can be shared. In reality, it is relatively rare that orders are made against state pensions but they are taken into account when looking at pension provision as a whole.

This may seem like the simplest option but it is extremely important to take advice in relation to this. Pensions are complex assets and there are often hidden benefits. A cash lump sum is unlikely to generate the same income as money in a pension fund. Therefore, unless pensions are small and relatively straightforward, it is unlikely that this will be a viable option. We recommend you seek specialist legal advice in relation to pensions.